Correlation Between Albertsons Companies and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and Xponential Fitness at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Albertsons Companies and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and Xponential Fitness, you can compare the effects of market volatilities on Albertsons Companies and Xponential Fitness and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Albertsons Companies with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Xponential Fitness.
Diversification Opportunities for Albertsons Companies and Xponential Fitness
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Albertsons and Xponential is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Albertsons Companies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Albertsons Companies are associated (or correlated) with Xponential Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xponential Fitness has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Xponential Fitness go up and down completely randomly.
Pair Corralation between Albertsons Companies and Xponential Fitness
Considering the 90-day investment horizon Albertsons Companies is expected to generate 13.17 times less return on investment than Xponential Fitness. But when comparing it to its historical volatility, Albertsons Companies is 5.33 times less risky than Xponential Fitness. It trades about 0.0 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,383 in Xponential Fitness on October 13, 2024 and sell it today you would lose (888.00) from holding Xponential Fitness or give up 37.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. Xponential Fitness
Performance |
| Timeline |
| Albertsons Companies |
| Xponential Fitness |
Albertsons Companies and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and Xponential Fitness
The main advantage of trading using opposite Albertsons Companies and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, Xponential Fitness can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Xponential Fitness will offset losses from the drop in Xponential Fitness' long position.| Albertsons Companies vs. Sprouts Farmers Market | Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Grocery Outlet Holding | Albertsons Companies vs. Weis Markets |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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